On 18 September 2015 Sars published the draft tariff notices for technical amendments planned for January 2016 on which comment is due by 16 October 2015. Tariff 2016 relates to Part 1 of Schedule No. 1 of the Customs and Excise Act, 1964; Part 1 of Schedule No. 2; Part 1 of Schedule No. 3; Part 2 of Schedule No. 4; Part 5 of Schedule No. 4; and Part 3 of Schedule No. 5.
According to the Sars commentary the intended draft amendments to the Schedules are technical in nature and will have no effect on the duty structure. The draft amendments are as a result of requests by industry, Sars or other government agencies and are scheduled for implementation on 01 January 2016.
By the substitution of Note 2 in Chapter 39 of Section VII to Part 1 of Schedule No. 1 with the following:
2. For the purposes of this Chapter the expression "heat shrinkable" applies to products which at a temperature of 120°C have a shrinkage coefficient of 15 per cent or more.
By the substitution of Note 8 in Chapter 98 of Section XXII to Part 1 of Schedule No. 1 with the following:
8. For the purposes of this Chapter "automotive components" mean a new article which can be identified as being suitable for use in the manufacture of motor vehicles manufactured under rebate items 317.03 and 317.07 or original equipment components, including carpet cut to floorpan shape, leather seat covers cut to size, unfinished articles, including blanks and rough castings, having the essential character of automotive components.
By the insertion of the following Note(s) in Part 5 of Schedule No. 4: NOTES:
1. For the purposes of Chapter VA of the Act and this Schedule- (a) any imported goods referred to in any item of this Schedule shall, subject to compliance with any relevant note or rule, be admitted under rebate of environmental levy as contemplated in Note 3 of the General Notes to this Schedule to the extent that such rebate can be applied, except- (i) in respect of the rebate specified in item 412.09; and (ii) in rebate item 460.17, the environmental levy specified in Section D of Part 3 of Schedule No. 1. (b) the provisions for a rebate of duty on any goods specified in any item of this Schedule shall, subject to these notes, determine entitlement to any rebate of environmental levy, notwithstanding that no customs duty is leviable on the goods concerned. 2. Full duty when referring to the extent of rebate in any item in this Part means the environmental levy payable in terms of the relevant item of Part 3 of Schedule No. 1 less any rebate, refund or drawback of such levy granted previously in respect of the goods.
By the deletion of the following: Rebate Item Tariff, Heading, Rebate Code CD Description Extent of Rebate, 497.00 REBATES OF ENVIRONMENTAL LEVY, NOTES:
1. For the purposes of Chapter VA of the Act and this Schedule- (a) any imported goods referred to in any item of this Schedule shall, subject to compliance with any relevant Note or rule, be admitted under rebate of environmental levy as contemplated in Note 3 of the General Notes to this Schedule to the extent that such rebate can be applied, except- (i) in respect of the rebate specified in item 412.09; and (ii) in rebate item 460.17, the environmental levy specified in Section D of Part 3 of Schedule No. 1. (b) the provisions for a rebate of duty on any goods specified in any item of this Schedule shall, subject to these notes, determine entitlement to any rebate of environmental levy, notwithstanding that no customs duty is leviable on the goods concerned. 2. "Full duty" when referring to the extent of rebate in any item in this Part means the environmental levy payable in terms of the relevant item of Part 3 of Schedule No. 1 less any rebate, refund or drawback of such levy granted previously in respect of the goods.
Explanatory Memorandum
Technical Amendments Planned For 2016
The draft amendments of the Schedules to the Act, 1964 are technical in nature and will have no effect on the duty structure. The amendments are as a result of requests by industry, Sars or other government agencies and are scheduled for implementation on 01 January 2016.
1. Amendments in Part 1 to Schedule No. 1
1.1 Request from National Brands for the creation of a separate tariff subheading for black tea. National Brands (the applicant) applied for the creation of a separate tariff subheading for black tea in immediate packings not exceeding 1 kg, to monitor between the bulk product that is mainly for the catering sector and products for the retail sales market they supply. The new 8-digit tariff subheading will enable the industry to monitor black tea destined for the retail market, since this is the product they supply in the Southern African Customs Union (SACU) market. They are currently using the Point of Sale (POS) data acquired from market research institutions to monitor the teas’. However, this is not an adequate platform, especially when it is being used on its own. The following tariff subheading is substituted: tariff heading 09.02 - Black tea (fermented) and partly fermented tea, in immediate packings of a content not exceeding 3 kg: The following new 8-digit tariff subheadings are inserted: 0902.30.10 - In immediate packings of a content not exceeding 1 kg, and 0902.30.90 – Other.
1.2 Request for separate 8-digit tariff subheadings for diallyl dimethyl ammonium chloride classifiable in tariff subheading 2923.90. Zetachem, a division of Omnia Group (Pty) Ltd submitted a request for the creation of separate tariff subheadings for diallyl dimethyl ammonium chloride classified in tariff subheading 2923.90. The application will assist the SACU industry to be more competitive against the importation of the subject product onto the local market. The product is classified in a residual tariff subheading 2923.90 which incorporates other products, making it difficult for the industry to monitor the direct competitive products imported. The creation of separate tariff subheadings will allow the SACU industry to monitor the origin, impact, the volumes and the average price of the subject product. ITAC has no objection to the application. The following 8-digit subheading is substituted: 2923.90 - Other:. The following new 7-digit and 8-digit subheadings are inserted: 2923.90.10 - Diallyl dimethyl ammonium chloride, 2923.90.90 – Other.
1.3 Request from the South African Tyre Manufacturers’ Conference (Pty) Ltd (SATMC) for the creation of separate 8-digit subheadings on rims classifiable in tariff headings 87.08 and 87.16. The South African Tyre Manufacturers’ Conference (Pty) Ltd (SATMC) together with the Tyre Association of South Africa (TIASA) and the Tyre Dealers and Fitment Centre Association of South Africa (TDAFA) applied for the creation of separate 8-digit tariff subheadings for tyres imported on rims classifiable as parts in headings 87.08 and 87.16. Tyres on rims are classified in residual tariff subheadings 8708.70.90 and 8716.90.90 that include other vehicle parts and accessories. The risks of tyres imported under these headings are that these tyres are not homologated at the time of importation and in addition, the tyres also attract a lower import duty than tyres classifiable in Chapter 40. The members of the three tyre industry associations are of the view that tyres are currently being imported under the said headings and then sold separately. This allows the importers to benefit from the lower rate of import duty payable for tyres imported on rims. The products in question require an import control permit issued by Itac. The following 8-digit tariff subheading is deleted: 8716.90.90 – Other. The following new 7-digit and 8-digit tariff subheadings are inserted: 8708.70.2 - Rims fitted with tyres: 8708.70.21 - Of a kind used on motor cars, 8708.70.23 - Of a kind used on buses or lorries, 8708.70.29 – Other, 8708.70.29 - Rims fitted with tyres.
1.4 Request for separate 8-digit tariff subheadings to provide for filled aerosol products. The Aerosol Manufacturers’ Association applied for the creation of 8-digit tariff subheadings for aerosol products. The key categories range from paints and varnish, lubrication preparations, to chemicals and allied products as well as organic composite solvents and thinners. According to the applicant, the South African industry is under tremendous pressure as importers misdeclare under the 6-digit international level. The applicant motivated that there were products imported into South Africa under tariff subheading for “other”. The splitting of the subheadings will allow the industry to monitor and evaluate imports and exports of the above mentioned products. The following 8-digit tariff subheadings are deleted: 3814.00.10 - Containing methane, ethane or propane chlorofluorocarbons (CFC's), whether or not containing hydrochlorofluorocarbons (HCFC's), 3814.00.20 - Containing methane, ethane or propane hydrochlorofluorocarbons (HCFCs), but not containing chlorofluorocarbons (CFCs), 3814.00.30 - Containing carbon tetrachloride, bromochloromethane or 1,1,1-trichloroethane (methyl chloroform), 3824.00.90 – Other. 3824.90.01 - Mixtures of hydrocarbons and lubricity agents, 3824.90.25 - Flotation reagents containing dicresyldithiophosphoric acid or alkyl dithiophosphates, 3824.90.37, Mono-, di- and triesters of glycerol with unmodified fatty acids, with a soap content (calculated as sodium stearate), by mass, of 3.5 per cent or more and a 1-monoglyceride content, by mass, not exceeding 38 per cent, 3824.90.40 - Mono-, di- and triesters of glycerol with a soap content (calculated as sodium stearate), by mass, of less than 3.5 per cent and a 1-monoglyceride content, by mass, not exceeding 45 per cent, 3824.90.45 - Phthalic acid esters of mixed aliphatic alcohols, 3824.90.47 - Preparations put up as correction fluids, 3824.90.50 - Chlorinated paraffins, 3824.90.60 - Other mixtures consisting mainly of chemicals containing a phosphorus atom to which is bonded one methyl, ethyl, n-propyl or isopropyl group but not further carbon atoms. The following 8-digit subheadings are substituted: 3208.20 - Based on acrylic or vinyl polymers: 3403.19 - Other:, 3403.99 - Other: The following new 8-digit tariff subheadings are inserted and substituted: 3208.20.10 - In aerosol containers, 3208.20.90 – Other, 3403.19.10, In aerosol containers, 3403.19.90 – Other, 3403.99.10 - In aerosol containers, 3403.99.90 – Other, 3814.00.1 - Containing methane, ethane or propane chlorofluorocarbons (CFC's), whether or not containing hydrochlorofluorocarbons (HCFC's): 3814.00.11 - In aerosol containers, 3814.00.19 – Other, 3814.00.2 - Containing methane, ethane or propane hydrochlorofluorocarbons (HCFCs), but not containing chlorofluorocarbons (CFCs): 3814.00.21 - In aerosol containers, 3814.00.29 – Other, 3814.00.3 - Containing carbon tetrachloride, bromochloromethane or 1,1,1-trichloroethane (methyl chloroform):, 3814.00.31- In aerosol containers, 3814.00.39 – Other, 3814.00.9, Other:, 3814.00.91- In aerosol containers, 3814.00.99 – Other, 3824.90.1, Mono-, di- and triesters of glycerol with a soap content (calculated as sodium stearate), by mass, of less than 3,5 per cent and a 1-monoglyceride content, by mass, not exceeding 45 per cent, in aerosol containers, 3824.90.11 - In aerosol containers, 3824.90.19 – Other, 3824.90.2 - Flotation reagents containing dicresyldithiophosphoric acid or alkyl dithiophosphates:, 3824.90.21- In aerosol containers, 3824.90.29 – Other, 3824.90.3 - Mono-, di- and triesters of glycerol with unmodified fatty acids, with a soap content (calculated as sodium stearate), by mass, of 3,5 per cent or more and a 1-monoglyceride content, by mass, not exceeding 38 per cent:, 3824.90.31- In aerosol containers, 3824.90.39 – Other, 3824.90.4 - Mono-, di- and triesters of glycerol with a soap content (calculated as sodium stearate), by mass, of less than 3,5 per cent and a 1-monoglyceride content, by mass, not exceeding 45 per cent:, 3824.90.41 - In aerosol containers, 3824.90.49 – Other, 3824.90.5 - Phthalic acid esters of mixed aliphatic alcohols:, 3824.90.51 - In aerosol containers, 3824.90.59 – Other, 3824.90.6 - Preparations put up as correction fluids:, 3824.90.61 - In aerosol containers, 3824.90.69 – Other, 3824.90.7 - Chlorinated paraffin:, 3824.90.71- In aerosol containers, 3824.90.79 – Other, 3824.90.8 - Other mixtures consisting mainly of chemicals containing a phosphorus atom to which is bonded one methyl, ethyl, n-propyl or isopropyl group but not further carbon atoms:, 3824.90.81 - In aerosol containers, 3824.90.89, Other - 3824.90.9, Other:, 3824.90.91- In aerosol containers, 3824.90.99 – Other.
1.5 Request from the Textile Federation of South Africa (TEXFED) for the amendment to statistical unit on articles of Chapters 61 and 62. TEXFED requested the amendment of the statistical unit for articles classified within Chapters 61 and 62 to be changed to kilograms. The statistical unit for the said articles of Chapters 61 and 62 are currently expressed as “units”. In total 20 tariff subheadings in Chapter 61 have “kilogram” as the statistical unit while 101 tariff subheadings have “unit” as the statistical unit. In Chapter 62, 43 tariff subheadings have “kilogram” as the statistical unit while 111 tariff subheadings have “unit” as the statistical unit. As motivation for the request, the applicant stated that the clothing and textile sectors had been beset for many years by rampant under-valuation of imports originating from a number of countries, most notably from China. This under-valuation has over the years resulted in significant job losses and business failures, as well as the negative impact on the fiscus due to possible under collection of import duties. The use of “kilograms” as the statistical unit will enable Sars and industry to improve risk management within the clothing sector.
1.6 Request for separate 8-digit tariff subheadings to provide for steel used in the production of cans. Nampak Divfood (the applicant) submitted a request for the creation of separate tariff subheadings for steel used in the production of cans. The applicant needs to monitor imports of raw material and average prices of steel coated with tin or zinc used for the manufacture of cans. The steel used for cans moves in small volumes compared to the tariff subheadings they are currently cleared under. The following 8-digit subheading is substituted: 7210.12 - Of a thickness of less than 0,5 mm: The following new 8-digit subheadings are inserted: 7210.12.10 - Other, of a thickness less than 0.19 mm, 7210.12.20 - Other, of a width exceeding 950 mm, 7210.12.90 - Other
1.7 Amendment in Chapter 39. Additional Note 2 in Chapter 39 is amended to replace the reference to “has a bearing on” with “applies to” to clarify the intention of the Note. The Note is amended as follows: “For the purposes of this Chapter the expression “heat shrinkable” applies to product which at a temperature of 120 OC has a shrinkage coefficient of 15 per cent or more”. The opportunity is also used to amend the wording on the descriptions of tariff subheadings 3920.20.25, 3920.20.30, 3920.20.35 and 3920.20.40 from “not heat shrinkable” to read as “not heat shrinkable as defined in Additional Note 2 to Chapter 39”. This will ensure that stakeholders are aware of the Note that defines “heat shrinkable”.
1.8 Amendment of Note 8 to Chapter 98. Note 8 to Chapter 98 is substituted to remove the reference to rebate item “317.04 up to 31 December 2012” applicable to MIDP. The Note is amended as follows: “For the purposes of this Chapter "automotive components" means a new article which can be identified as being suitable for use in the manufacture of motor vehicles manufactured under rebate items 317.03 and 317.07 or original equipment components, including carpet cut to floorpan shape, leather seat covers cut to size, unfinished articles, including blanks and rough castings, having the essential character of automotive components”. 2. Amendment of Schedule No. 2. Anti-dumping items 215.02/8716.80.10/01.08, 215.02/8716.80.10/02.08 and 215.02/8716.80.10/03.08 published in Government Gazette No. 39173, dated 4 September 2015 are deleted in order to insert them in the correct anti–dumping code applicable to vehicles and parts and accessories thereof. Anti-dumping items 217.02/8716.80.10/01.08, 217.02/8716.80.10/02.08 and 217.02/8716.80.10/03.08 are inserted in the correct section applicable to vehicles in Section 17 as Section 16 of the HS is reserved for machinery and electrical equipment. 3. Amendment of Schedule No. 3. Rebate item 304.07/23.04/01.04 provide for oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of soya-bean oil, in such quantities and at such times as the International Trade Administration Commission may allow by specific permit for the manufacture of preparations of a kind used in animal feeding, with effect from 1 July 2008 up to and including 30 June 2011. The rebate provision is deleted, as it covered the period from 1 July 2008 to 30 June 2011. Provisions relating to the Motor Industry Development Programme (MIDP) were replaced with the Automotive Production and Development Programme that came into effect in 1 January 2013. The provisions of MIDP were in place from 2005 up to and including 31 December 2012. These provisions were not immediately removed from the Schedules of the Act. Two years has now lapsed since the implementation of APDP as such stakeholders are now acquainted with the new provisions. Notes to rebate item 317.04 as well as rebate items 317.04/98.01/01.04 to 317.04/98.01/05.04 are deleted. 4. Amendment of Schedule No. 4. Rebate item 460.27/00.00/01.00 in Part 2 of Schedule No. 4 provides for goods entered for home consumption on or before 31 December 2010, in such quantities, at such times and under such conditions as the International Trade Administration Commission may allow by specific permit, for the installation of fuel pipeline systems. The rebate provsion is deleted as it was created for goods entered for home consumption on or before 31 December 2010. The Notes to rebate item 497.00 in Part 5 of Schedule No. 4 are deleted and transferred to the designated page for notes on rebates of environmental levy in Part 5 of Schedule No. 4. Note 1 to rebate item 460.17 is deleted and Notes 2 to 3 are renumbered as Notes 1 to 2. Rebate items 460.17/00.00/02.00, 460.17/8701.20/01.06, 460.17/87.02/01.04, 460.17/87.03/01.04, 460.17/87.04/01.04 and 460.17/87.06/01.04 applicable to MIDP are deleted. 5. Amendment of Schedule No. 5. Rebate item 539.01/2710.1/01.05 provides for fuel supplied by Petroleum Oil & Gas Corporation of South Africa (SOC) Ltd for the trunkline-fill of the NMPP from Island View Durban to Jameson Park, before 31 March 2012, not exceeding 154 744 400 li. The rebate provision is deleted as the expiry date was 31 March 2012. Note 1 to rebate item 537.00 is deleted and Note 2 is renumbered as Note 1. Rebate item 537.01, 537.01/8701.20/01.06, 537.01/87.02/01.04, 537.01/87.03/01.04, 537.01/87.04/01.04 and 537.01/87.06/01.04 applicable to MIDP are also deleted.
